A character is one letter or other symbol. There are many ways to format characters in word processing programs. It is possible to make characters bold, italic, underlined, or perhaps some other attribute. Not all word processors will do all these things, but most will do bold, italic, and underline. Often you activate the command by choosing it from a menu, clicking on a toolbar icon, or activating a key sequence. Once you have started the command, anything you type will be typed in that style. When you want to go back to standard letters, you activate the same command again. Commands that turn off and on like this are called toggles, because they are reminiscent of toggle switches. Many word processors allow you to enter the text without any format, then to select a set of characters as a block (like you did to copy and paste), then to activate the command. Experiment with your word processor to see how it works.
Word processors that feature WYSIWYG frequently support the use of fonts. A font is defined in computing as a combination of a special character set and type size. In the typewriter world, you were pretty much stuck with the size and style of letters the typewriter came with. Some of the later typewriters had the characters on a ball you could change, but you still had very little control of exactly how the letters looked. In a modern word processing application, you have a great deal of control. You can choose different type faces that look like script, handwriting, Old English, or whatever. After you have chosen a basic look for your letters, you can choose what size the letters are.
Fonts are measured by typesetters in points. 72.25 points is equivalent to an inch. Most standard text is 10 points. A newspaper headline might be 200 points. You may be able to control other attributes of each letter, such as its color, a shadow, and other advanced features.